The Global Sustainable Competitiveness Index

The Global Sustainable Competitiveness Index (GSCI) measures competitiveness of countries in an integrated way. It is calculated based on 111 measurable, quantitative indicators derived from reliable sources, such as the World Bank, the IMF, and different UN agencies.the 111 indicators are grouped into 5 sub-indexes - Natural Capital, Resource Efficiency & Intensity, Intellectual Capital, Governance Efficiency, and Social Cohesion. More details on the methodology are available here.

Natural Capital: the given natural environment, including the availability of resources, and the level of the depletion of those resources.Social Capital: health, security, freedom, equality and life satisfaction within a country.Resource Management: the efficiency of using available resources as a measurement of operational competitiveness in a resource-constraint World.Intellectual Capital: the capability to generate wealth and jobs through innovation and value-added industries in the globalised marketsGovernance Efficiency: Results of core state areas and investments – infrastructure, market and employment structure, the provision of a framework for sustained and sustainable wealth generation

The Sustainable Competitiveness Index 2017

The Sustainable Competiveness Ranking 2017 is dominated by European nations:

Of the top twenty nations only three are not European – New Zealand on 13, South Korea on 16, and Japan on 20.

Scandinavia covers the top 5 ranks. Sweden is leading the Sustainable Competitiveness – followed by the other 4 the Scandinavian nations.

The top 20 are dominated by Northern European countries, including the Baltic states and Slovenia

Germany ranks 14, the UK 22, and the World’s largest economy, the US, is ranked 29. The US ranks particularly low in resource efficiency, but also social capital - undermining the global status of the US in the future

Some of the least developed nations have a considerable higher GSCI ranking than their GDP would suggest (e.g. Laos, Timor, Burma, Bhutan, Suriname…)

Asian nations (South Korea, Japan, Singapore, and China) lead the Intellectual Capital ranking. However, achieving sustained prosperity in these countries might be compromised by Natural Capital constraints and current high resource intensity/low resource efficiency

The Social Cohesion ranking is headed by Northern European (Scandinavian) countries, indicating that Social Cohesion is the result of economic growth combined with social consensus

Sovereign bond ratings do not take into account the underlying sustainability factors; they only describe symptoms, not causes. It is high time that credit ratings do take into account the basis of sustained wealth, because sovereign credit ratings do not fully reflect investor risks.